If the Current Account Has a Negative Balance of $100

question 400

Multiple Choice

If the current account has a negative balance of $100 and the capital account has a positive balance of $80, there will be _ _ in official reserves of _ _.

• A) an increase; $20
• B) an increase; $180
• C) a decrease; $20
• D) a decrease; $180

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Definitions:

Government Purchases

Expenditures made by the government for goods and services including infrastructure, public services, and national defense.

GDP

GDP represents the aggregate financial or market worth of all completed products and services generated inside the confines of a nation over a defined timeframe.

Real GDP

The measure of the value of all goods and services produced within a country's borders, adjusted for inflation, over a specific time period.

GDP

Gross Domestic Product, the total market value of all final goods and services produced within a country in a given period, used as a broad measure of economic performance.